Over the past ten years there has been a dramatic increase in interest in Gold as a form of investment and safekeeping. Many investors are just beginning to discover the ability to trade gold in the forex market. Prior to the 1990’s the forex market was primarily an exclusive investment vehicle that was dominated by large banks and financial institutions. However, today the ability to trade gold against other currencies and primarily the U.S. dollar is now available to retail investors. That means that you can login and trade gold on a 24-hour basis right from home with your own trading platform. There are a number of advantages to trading gold on a forex platform: Trade up to 100: 1 Leverage. The use of leverage (more buying power) means that can increase possible financial gain with a smaller initial risk of funds. For example if you were to open a trade with a risk of $1000 and you used 100:1 leverage, you would be able to trade $100,000 in value of gold through the forex account.
Trade Anytime of the Day
Trading gold in the forex market enables you to trade 24 hours a day during the weekdays between 5:00 pm Eastern time on Sunday to 5:00 pm Eastern time on Friday. The forex market is an international market unlike traditional stock exchange markets which are limited to their specific business hours of trading.
As a trader, one of the most important things to consider before entering any trade is will be able to exit the trade. Every market trade in any investment requires a buyer and a seller. The forex market is the world’s largest marketplace with over $3.2 trillion dollars of trading activity per day. That is good news for whenever you want to exit your gold trade.
Trade up or down
In forex can trade gold both up and down. Most people when trading only think in one direction and usually that direction is up. However, as a gold trader with a forex platform have the ability of trading both for or against the price of gold. In other words if you think that the price of gold is going to go down rather than up you could buy the US dollar against the price of gold.
The Successful Traders Plan
As the old expression goes, most people don’t plan to fail, they only fail to plan. Having a game plan is crucial to your success as a gold trader. You need to understand why you are getting into a position before you decide to jump into a gold trade. You will also need to have an exit strategy before you ever take on a trade. Furthermore, you need to make sure that you follow your plan. Never attempt to take revenge on the market or get into a situation where you beat yourself up over a trade gone badly. There is no room for emotions in the game of trading. Don’t try which u doesn’t know to do and fail instead rely on the people who can do it for u.
Make some goals for what you want to accomplish, If you are looking for a get rich quick plan, understand that you may find yourself in a get poor quick outcome. Make sure that you have realistic goals for what you want to achieve when trading gold What resources and educational materials are you going to need to acquire and study in order for you to achieve your goals? Like any successful person in life it will take much study and practice to make it to the top and in trading it is only the top percentile that makes any money in this gold trading. Trust your financial experts they are working with their several years of experience.
The challenge for all traders is to maintain discipline in their trading plan. A great tool to use is a journal of your trading activity. Over time you will be able to see the progress that you have made as a trader and also be able to recognize further areas for improvement. Once again this all helps you to get income on ur investment.
Some of the things you will want to incorporate into your gold trading plan are the specific hours you trade in the day, the types of chart analysis that you use, the size of lots that you limit yourself to trading, the percentage of your account that you limit for any given trade. One of the best ways to create a wealth is trusting ur Gold trade experts. They will trade carefully and You will get Returns on ur investment as they gain profit from trading.
There are two reasons to consider investing in gold:
A) Historically, gold has been considered a safe haven in times of economic, geopolitical and financial instability. Inflation and currency devaluation are also positive environments for gold, because it holds its value.
B) Gold investing allows investors to gain financially from increasing gold prices (or decreasing gold prices, in the case of short sellers, but more about that later).
Some of those beneficial gold-investing conditions are present today Including:
First, the world economy has slowed dramatically, with the United States in the midst of a downturn unlike any seen since the Great Depression.
Second, political skirmishes continue around the world: This is evidenced by large numbers of workers in China’s Pearl River Delta region being out of work and the growing problem of drug cartels in Mexico close to many of the manufacturing centers. Furthermore, countries such as the Ukraine are facing problems with their economy that could stall further advances in democratic reform. Even wealthy regions of the world such as the Middle East are facing economic problems as a result of the drop in oil prices.
Finally, there are the financial markets, which have plummeted in 2008 and 2009: On February 23, 2009, the Dow Jones Industrial Average and the S&P 500 Index both plummeted to near 12- year lows. Investors are concerned.
At the same time, gold traders are a bit mystified because the S&P/Citigroup Gold & Precious Metals Index, a widely used measure of gold prices, is down 45.46% as of December 31, 2008.
But this simply means there is considerable room for improvement—and significant opportunities for gold investors. Just consider the ratio between the Dow/Gold Ratio, which is calculating by dividing the Dow Jones Industrial Average by the price of an ounce of gold. In the past century, many major economic crises—including the Great Depression and World War II—caused the Dow/Gold Ratio to plummet. So, a low Dow/Gold Ratio is widely considered an indicator of how bad a recession is. And during bad recessions, many investors have tried to preserve their assets by investing in gold, thereby driving up the price of gold. As of February 2009, the Dow/Gold Ratio was below 8, which is historically very low.
The History of Trading Gold
To understand the value of trading gold, it helps to know the history of this commodity, which has been considered a valuable physical asset for thousands of years.
Since its discovery, gold—because of its rarity and difficulty to mine—has been considered a currency and an investment, used to create political power and settle trades. In 1946, after World War II ended, the Bretton Woods conference fixed the price of gold at $35 per ounce—and created a gold standard in the United States, meaning that gold backed the U.S.dollar. With the price of gold fixed, trading gold was pointless.
In 1971, the United States, under the leadership of President Nixon, abandoned this system, paving the way for gold trading (although central banks around the world still hold gold for use in times of emergency). This action culminated in 1974, when the United States lifted a 41-year ban on the private ownership of gold by U.S. citizens, allowing individuals to profit from trading gold. In the nine years following the abandonment of the gold standard, gold prices skyrocketed, rising 2,200% in U.S. dollar terms and peaking higher than $800 in the early 80's much to the glee of gold traders around the world. But gold trading wasn’t as easy as it seemed: This gold market rally was followed by a 19-year bear market for gold, when gold prices dropped as low as $260 in 1999, much to the gold traders’ chagrin. But the gold market, like other markets, is cyclical, and despite the fact that gold has now reached new all time highs in excess of $1600, in real terms—that is, adjusted for inflation—this is still well below the $850 peak reached in 1980.
Although it is impossible for gold traders to predict gold prices, we do know one thing:Volatility is the new reality when it comes to trading gold. But that is not necessarily bad: Gold traders can benefit from upturns as well as downturns by buying long or shorting gold. The key to successfully trading gold is finding the trend amid the volatility. In subsequent articles, we will offer tips for doing so.
Why Trade Gold Instead of Investing in Gold?
Gold has been considered a valuable physical asset for thousands of years, but many people shy away from buying it because they think they can only do so by investing. But there is another option: trading gold.
The most obvious way to invest in gold is to buy gold in its physical form—that is, bars and coins. The problem with buying gold in its physical form is that doing so involves considerable transportation and storage costs. Moreover, physical gold is relatively illiquid, so it is meant for buy-and-hold gold investors only.
Another option, also in the investing category, is investing in gold stocks, such as mining companies, either individually or through mutual funds. While these investments provide investors with exposure to the gold and are more liquid than physical gold, they don’t offer the pure gold exposure many gold traders demand. Moreover, at times gold stocks will move down with the market as a whole when there is no problem with the company or with gold as an asset, and that can add a level of risk to your investment.
Another option is a gold-related exchange-traded fund (ETF). ETFs are pools of investments that trade on an exchange like stocks. Typically, gold ETFs are intended to track a percentage of an ounce of gold, so in that sense they are a way to trade physical gold. While ETFs can be good for speculators who wish to buy gold or sell it short, there are downsides. You don’t have title to the underlying asset—the gold itself—and administrative fees may be unappealing to some investors.
You can invest in a paper representation of gold, such as futures and options. Futures and options are contracts or options to buy or sell a specific security or commodity (such as gold) at a specific price at a specific time. Futures contracts are used to trade gold in the short-term; rarely does a gold trader take delivery of the gold. While trading gold with a futures contract does have “counterparty” risk—the possibility that the person on the other side of the contract won’t deliver—the fact that gold contracts are traded on established exchanges minimize the possibility of losing money when trading gold.
Finally, you can trade the so-called spot gold live chart, which lets you take a long or short position in gold while simultaneously taking the opposite position in the U.S. dollar—so trading spot gold is much like trading forex pairs. We’ll talk about trading spot gold more in another article.
Trading Gold, the New Way to Combat the Economic Crisis
As we explained in “Why Invest in Gold,” gold has long been considered a safe haven in times of economic, geopolitical and financial instability—and all of today’s bad economic news has made gold a hot commodity, in many ways.
As consumers feel the economic pinch of unemployment and declining housing and equity prices, they are turning to pawnshops. Recent reports say businesses buying gold have seen a 50 percent increase in activity in recent months.
Individuals selling their gold maybe better off looking into trading gold online. As we mentioned above, gold has long been considered a safe haven in times of economic instability. Inflation and currency devaluation (which we are experiencing today, as the U.S. Federal Reserve Board, concerned about the economy, inflates the U.S. money supply by lowering interest rates and selling U.S. government securities) are also good for gold.
In today’s economic and financial environment, many investors have taken flight from riskier assets such as stocks and derivatives, into gold, creating significant opportunities in gold trading. Gold recently hit a 25-year high, and there appears to be room for improvement: The Dow/Gold Ratio, which is calculated by dividing the Dow Jones Industrial Average by the price of an ounce of gold, was below 8, which is historically very low, as of February 2009—and if history is any indication, individuals will do as they have done in the past to preserve their assets by investing in gold, thereby driving up its price. How can you take advantage of these conditions? By trading gold. So be a part of Gold Trade Funds and you will be on the to successful life in achieving ultimate dreams of your life, it is easy to get started trading gold with a very small cash outlay.